Reverse Mortgages

What is a Reverse Mortgage?

A reverse mortgage, also known as a Home Equity Conversion Mortgage (HECM), is a type of loan that allows homeowners 62 years or older to convert part of the equity in their home into tax free* money. Originally conceived as a means to help senior homeowners with limited income use that equity to pay off debts (including traditional mortgages), cover basic monthly living expenses or pay for health care, new rules and regulations have helped reverse mortgages become a valuable tool in an overall financial plan.

Why Choose a Reverse Mortgage over a Traditional Home Equity Loan?

To qualify for a traditional home equity loan or line of credit, you must have good credit and a sufficient income stream to maintain the loan payments. With less stringent income and credit requirements, a reverse mortgage makes it easier for those individuals on a fixed income or without a steady income to qualify for a loan. And, they are backed by the U.S. Department of Housing and Urban Development (HUD) and are insured by the Federal Housing Administration (FHA).

Eligibility Requirements for a Reverse Mortgage

• The home must be a primary residence.
• One borrower in the primary residence must be at least 62 years of age.
• Residence must be a single family home, multi-family home up to four units, or a HUD approved condominium.

How Much Money Can I Get?

The amount of money available from a reverse mortgage is dependent on two key factors:

• At least one homeowner needs to be 62 years of age.
• The more equity you have in your home, the more money will be available to you.

How Can the Proceeds from a Reverse Mortgage be Distributed?

You have the option to receive payments in any of the following methods or a combination of them:

• Lump sum
• Monthly
• Credit line

Who Owns the Home and How is the Reverse Mortgage Paid Back?

The borrower retains ownership of the home at all times. If they decide to sell their home, move to another primary residence, or if they pass away, the borrower(s) or their heirs have the option to:

How Do I Get Started?

This website provides a broad overview of the reverse mortgage program and its benefits. For additional information, speak with one of our experts for a free consultation to determine if a reverse mortgage is the best product for your financial needs. In addition, the U.S. Department of Housing and Urban Development (HUD), who regulates this program, requires that all potential applicants speak with a HUD approved counselor before proceeding with a reverse mortgage application.